Picture it: It’s another family gathering, and the older relatives tell stories about back in the day when everyone lived together under one roof. You innocently inquire about how that’s different from today — after all, you grew up with your brothers and sisters in the same home.
Then, finally, your aunt sets you straight. It wasn’t just the immediate family – this was a multigenerational home. It was grandpa, grandma, their parents, and your aunt and mom — plus your dad when they got married. You spit out your coffee, but after regaining your composure, you think about it and see that this idea could have profound benefits.
There are many reasons why families may choose to live in multigenerational housing. Some families may choose this type of living arrangement because it allows multiple generations to live together and provide support and assistance to one another. This can be particularly helpful for older family members who may need help with daily tasks or for young children who may benefit from having grandparents or other relatives nearby.
Multigenerational housing can also be a more affordable option for families, as it allows multiple people to share the cost of housing and other expenses. Additionally, many people enjoy the sense of community and connection that comes with living in a multigenerational household.
While this may seem like a retro sentiment, multigenerational homes are gaining popularity. This article will give you all the information you need about multigenerational homes. You’ll find out what they are, why people are interested in them, how to purchase one, and how to make multigenerational living work for you.
Multigenerational living can be a way to save money while also spending more time with your loved ones (Photo credit: Carlos David)
What is a a multigenerational home?
According to the Annual Social and Economic Supplement of the Census Bureau’s Current Population Survey (IPUMS), a multigenerational home includes two or more adult generations or a “skipped generation,” consisting of grandparents and their grandchildren younger than age 25. In this definition, adult children living in a parent’s home must be 25 or older (18- to 24-year-olds living in their parents’ home are not treated as an adult generation).
However, 18- to 24-year-olds are treated as an adult generation if they are the homeowner, and a parent or other relative from an older generation lives with them. This arrangement makes up a relatively small share of multigenerational households. In other homes, the householder could be from the older or younger adult generation.
Why are people interested in multigenerational living?
According to Pew Research Center, 37 percent of men between the ages of 25 and 29 surveyed live with older relatives. Twenty seven percent of women of the same age range also live in multigenerational households.
Given the current state of the economy, sharing the financial load for homeownership makes sense for many. However, the resurgence of multigenerational living isn’t a recent development. Multigenerational living has been on the rise for the last five decades. The United States saw an acceleration of multigenerational homes during the recession between 2007 to 2009. While the pace has slowed since that time, multigenerational living is still growing and shows no signs of peaking.
According to an analysis of census data from 1971 to 2021, the number of people living in multigenerational family households quadrupled, reaching 59.7 million in March 2021. The share more than doubled to 18 percent of the U.S. population.
Forty percent of those surveyed by Pew said financial issues were the main reason for multigenerational living. Thirty-three percent said it was due to caregiving, either for a child or an adult in the home. Meanwhile, 28 percent said this was a relationship they had always maintained with their family.
On the lesser end of the spectrum, 15 percent cited a change in relationship status, while 12 percent referenced a desire for companionship. Of course, the COVID-19 pandemic was also a factor, with 13 percent listing it as why they live with multiple generations under one roof.
Since 2000, the multigenerational household population has grown by 22.1 million people, but some groups played a more significant role than others in driving that change. For example, Americans younger than 40 accounted for 49 percent of the increase in the multigenerational household population but only 17 percent of overall population growth.
Overall, young adults are holding off on marriage until later and staying in school longer than previous generations, which may contribute to their choice to live with other family members under one roof.
BIPOC and Latinx groups lean towards multigenerational living (Photo credit: Mego-studio)
Minorities and immigration factor into multigenerational homes
The increase in multigenerational living is partially attributed to the rapid growth of the U.S. Asian and Latin populations who, along with Black Americans, are more likely than White Americans to live with extended family, especially if they are immigrants.
By age, the highest share in this living arrangement is among young adults, a group that, compared with prior generations when they were young, generally stays in school longer, postpones or forgoes marriage, and delays forming their households. Among young adults ages 25 to 29, 31 percent live in multigenerational households, often in their parents’ homes.
The National Association of Home Builders surveyed in 2021. The NAHB released the publication What Home Buyers Want that year, and their data is similar to that of the U.S. Census. The NAHB surveyed 3,200 people and found that among Latinx buyers, for example, 53 percent favor buying a multigenerational home, compared to 27 percent who would oppose it.
Among Black and Asian buyers, 50 percent and 46 percent, respectively, would prefer a multigenerational home, significantly higher shares than the 30 percent and 29 percent who would be against the idea. Meanwhile, only 35 percent of White buyers prefer a home designed for multiple generations, compared to 42 percent who do not like that option.
Rose Quint, the assistant vice president of survey research for the NAHB, conducted the What Home Buyers Want data collection.
“Culturally, some minority groups are more open and willing to consider multigenerational living,” Quint said. “Cost of living is also a big component of this issue. Multigenerational living happens more often in places where housing is costly. Hawaii and California are the top two states where you see the most multigenerational homes. They are very diverse states, and they are also quite expensive.”
Breaking down the contribution of funds is critical before you sign your mortgage (Photo credit: Fizkes)
How do you purchase a multigenerational home?
You first need to consider the number of people living in the house and their individual needs. If young children are in the home, can they share a room, and for how long? Consider the mobility levels of everyone involved. The seniors in the house will likely be happiest if they can keep everything on one floor— including the bedroom, bathroom, kitchen, and living area.
Think about how your family functions every day. For example, do you want to eat all your meals together? In that case, you’ll benefit from a large dining room. Are there family members who depend on shift work? You might want to think about a separate entrance and living area where you won’t disturb others while coming and going.
Ultimately, you’ll want spaces where the entire family can congregate and other areas (beyond the bedrooms) where some privacy can be provided, alone or in small groups. You’ll also want to consider traffic flow. For example, does everyone need to pass through a living room before getting to the kitchen? Make sure those high-demand areas are the easiest to access without disrupting others.
Now that you’ve determined everyone’s needs, it’s time to consider the best way to buy the house.
The easiest way to purchase is to have one person act as the buyer while everyone agrees on financing. Lenders are open to having multiple people buying a home, but they will scrutinize the weakest link among your buyers. The lender needs to feel confident that someone in your group will be able to pay the loan if another person defaults.
Let’s say you’re buying a home with your parents, and your dad has a history of missed payments. A mortgage lender looks at your father’s low credit and worries that they can’t count on him to help make the mortgage payments. They won’t be as concerned if you have an excellent credit score and enough income to make the mortgage payments independently.
However, if you’re counting on your dad’s income to make payments, there may be a problem. In this case, the lender may deny your loan application or offer you a higher interest rate.
If everyone in your group has funds to contribute, it’s best to create a written agreement that refers to the agreed contribution of each person. For example, a typical ownership structure involves one person or a couple on the title. At the same time, the parents or grandparents provide down payment funds and share in the daily expenses and sometimes the mortgage.
Multigenerational homes typically have more square feet and additional features like extra bathrooms and more oversized garages, so they’re likely to be a little more expensive than a one-family house. However, the cost is significantly lower than maintaining two separate households, which is an appealing selling point, especially during inflation.
Don’t forget: It’s important to discuss legal arrangements when more than one generation is on the loan and the title.
How do you make multigenerational living work?
Whether you plan to buy a home together or already have a home everyone can share, you need to speak frankly about financial responsibility. When you live with someone, your finances (and often, your financial reputation) become entwined. For example, suppose you can’t count on the other adults in the household to pay the mortgage, utilities, maintenance, or additional costs associated with owning a home. In that case, you need to re-evaluate your living situation. Are you comfortable taking on the extra burden?
Know that living with an irresponsible person means you may be forced to become ultra-responsible. If they don’t pay their portion of the mortgage one month, you’ll need to cover the entire thing. Likewise, your credit could be hit if they frequently forget to pay the water bill. The responsible thing to do — unpleasant as it may be — is to imagine what would happen if you were in an accident and had to take a long period off work. Could you count on your other family members to make timely payments on all bills?
If not, think twice about co-signing anything.
You’ll need to have some difficult and awkward conversations before living together. Here are some of the questions you need to ask each other:
- Do we only want one of our names on the mortgage, or will we own it jointly?
- Are we splitting the down payment? If not, who will pay for it?
- Are we splitting the mortgage payment? How much will each of us pay each month?
- Do you have money in an emergency fund to cover bills in case of a job loss or unexpected illness?
Once those questions are answered to everyone’s satisfaction, hire a lawyer to draw an agreement. Casually handling these agreements can lead to disaster. On the other hand, any fee you pay for a written contract may be worth its weight in gold, particularly if it heads off disagreements.
Make sure all these bases are covered:
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- Missed payments: What happens if one party does not make their portion of the mortgage payment?
- Approved occupants: Who else can move into the house? For example, let’s say you’re purchasing a home with your parents, and your sister and her four kids want to move in on your parent’s dime. Is that okay? Would you instead decide in advance that only certain people can live in the house?
- Death of one (or more) owners: What happens when one of the joint owners dies? This is an important question. If a co-owner dies and you have a joint mortgage, their share of the property passes to you. However, if you purchase the house as tenants in common, you each have the right to leave your portion of the property to whomever you want. If the home must be left to you, get it in writing.
- Taxes: Which party will claim the interest payments on their tax return? Will you split them?
- Estate planning: Should you cover each other financially if someone dies? In addition to deciding who gets the house, determine what happens next. For example, let’s say you’ve purchased a home with your parents. Together, your family can make the monthly mortgage payment, but your parents would not have enough income to stay in the house if you died.
- Decide if you should take out life insurance specifically to cover your half of the mortgage or whether you want to leave funds to help them protect your portion of the mortgage even after you’re gone.
Where can I find a house plan for a multigenerational home?
Houseplans.com has a wealth of options for multigenerational homes. You’ll find plenty of different styles and options — some offer floor plans where everyone is contained within a single house, and others offer separate units within the home for additional privacy.
A cottage farmhouse style home from houseplans.com
Size: 3,038 square feet
Six bedrooms, four-and-a-half bathrooms
Two floors
Four garages
The exterior has plenty of cozy cottage appeal; inside, you’ll find a wealth of space for your entire family. This is a duplex plan, allowing two or more family groups to live closely while allowing plenty of privacy. The open layout keeps things spacious, and the private ensuite bathrooms include great touches like double sinks.
A country-style home from houseplans.com
Size: 4,852 square feet
Four bedrooms, four-and-a-half bathrooms
Two floors
Three garages
This award-winning design is perfect for the family that wants many gathering space options. There’s a great room, expansive front and back porches, a refreshment center situated off the kitchen, and a serving bar that opens to the outdoor screened living room. On the ground floor, you’ll find a grand master suite wing that includes both a sitting room and a dressing room. There’s also a basement theater and guest suite and a separate apartment over the garage.
A craftsman ranch house from houseplans.com
Size: 4,183 square feet
Four bedrooms, three-and-a-half bathrooms
One floor
Three garages
If you have relatives who can’t handle stairs, this contemporary ranch craftsman floor plan is perfect for your family. Just past the entrance, you’ll be greeted by an impressive great room with vaulted ceilings and skylight. The massive kitchen makes gathering a breeze, with an island bar, prep island, and adjacent dining room. The main suite has a fireplace, vaulted ceiling, and master bath, offering a whirlpool tub, corner glass shower, and a vast 22-foot walk-in closet. On the opposing side of the house, two bedrooms share a Jack & Jill bathroom, and an additional bedroom could be used as an exercise room. At the end of the bedroom wing is a large pool room with a kitchen, fireplace, full bath, and dressing room. Finally, the three-car garage has a safe room and additional storage.
A European-style home from houseplans.com
Size: 3,774 square feet
Nine bedrooms, three bathrooms
Three floors
You’d never suspect that this grand European floor plan contains three separate units. Each level slightly differs in configuration, but they all include a great room, a u-shaped kitchen, a dining area, and three bedrooms. Each floor also has lots of closets and a laundry area for convenience.
A craftsman-style home from houseplans.com
Size: 5,157 square feet
Six bedrooms, four-and-a-half bathrooms
Two floors
Three garages
A two-story octagonal entry area makes a statement as you enter this home. The kitchen, dining, and great rooms create an open-concept floor plan perfect for family gatherings. There’s a mother-in-law suite right off the entry, with a private full bath and walk-in closet. Next, you’ll find the primary suite on the second floor, which features a step ceiling, his and hers walk-in closets, and a Jacuzzi tub. The second and third bedrooms have walk-in closets and share a Jack-and-Jill bath. Finally, bedrooms four and five have a walk-in closet and share the hall bathroom. All bedrooms and a loft are situated around the octagonal view below.
Think about your decision and talk it over
Multigenerational living isn’t for everyone, but there are many benefits. If you have children, they can grow up with a solid connection to their relatives (and you’ll likely never have to pay for a babysitter). You can build memories and traditions with your community under one roof. Just remember that being related isn’t an excuse for significant prep work. Follow our advice, plan, and get everything in writing before moving in together. That’s the best way to create and keep a multigenerational home.
